Moving home and small additional amount of borrowing required

Ems112

My husband and I are hoping to move home shortly. Our current situation is as follows:

- Current home value/aniticipated sale price roughly £185,000 - £190,000 (based on a similar property nearby selling for that in the last 3 months)

- Outstanding mortgage debt £88,000 (Woolwich lifetime tracker of BBBR + 0.74%)

- Savings of around £60,000

- New house purchase price £250,000 (it needs a lot of work doing to it, new kitchen, bathroom etc, liveable but would need doing pretty soon after we move in)

I have calculated that we will need roughly 65k (250,000 - 185,000) plus around 8 - 10k for moving costs (i.e. SDLT, agents selling fees etc) and around 20k to do the place up totalling just under £95,000. We would therefore need to borrow roughly £35,000 on top of what we already owe (assuming that Woolwich will agree to porting our existing deal, fingers crossed!).

So my question is, what is the best way to borrow the additional £35,000. Just thought I would see if anyone had any suggestions before I have to endure speaking to a Woolwich advisor on the telephone

Many thanks in advance!

kingstreet

You need to think of your new mortgage as a total. You can't transfer a mortgage from one property to another. When you sell the current property, the mortgage will be paid off and a new one starts on the new place.

If you go back to Woolwich and can satisfy their criteria, you should be able to take your new mortgage on the product which applies to your current deal with any further borrowing on on of the lender's new products.

So you'll be making a new application for the whole amount you need to borrow. It's worth bearing in mind that the surveyor carrying out the valuation for the lender may suggest a retention. This means some of the mortgage money would be held back until essential repairs are carried out. Effectively, you'll have to put more deposit down to be able to purchase the property.

You must speak to Woolwich before anythings else can be suggested.

Ems112

Ok, thanks. Although I say it needs a lot of work doing to it I don't think it is something that the surveyor will flag up to the lender, it is more works that I wish to be undertaken in order to bring it up to my decorative standards!! The property was built in the late 80s/early 90s so the decor is a little dated and tired but not appauling. I therefore would ideally want to borrow the money so that we can embark of the home improvements straight away rather than having to save up for 12-18 months. When you say "If you go back to Woolwich and can satisfy their criteria" do you mean what the original mortgage deal was based on etc? If so, we should still satisfy their lending criteria as it was a lifetime tracker based on us having more than 40% equity in the property. Our combined income is in somewhere in the region of 55k p.a so I am hoping affordability should not be a problem either.

kingstreet

As far as getting the new mortgage is concerned, you need to be able to demonstrate affordability for the whole new amount and to satisfy Woolwich's current loan to value requirements. They'll go through incomes, credit commitments, dependents etc to ensure the new mortgage is affordable. It matters not that you've been paying them for the last ten years, this is a whole new mortgage under the raised vigilence of the FSA.

Hopefully the retention thing won't apply. That's for problems such as damp, rewiring etc - what you'd call repairs rather than decorative improvement.

Ems112

Thank you for your help! I will telephone Woolwich at some point this week to discuss. Hopefully it will all be ok, we would need to borrow a total of aound £120,000 (which based on our joint income is just under 2.5 times) on a property worth £250,000 . We have no dependents, loans or outstanding credit card debt so fingers crossed it won't be a problem!

shop-to-drop

Most mortgage lenders have live online help would be worth visiting Woolwich website to ask there if live help is available.

kingstreet

Ems112 wrote: »

Thank you for your help! I will telephone Woolwich at some point this week to discuss. Hopefully it will all be ok, we would need to borrow a total of aound £120,000 (which based on our joint income is just under 2.5 times) on a property worth £250,000 . We have no dependents, loans or outstanding credit card debt so fingers crossed it won't be a problem!

It sounds straightforward. Pessimism is my middle name. I don't see you beating the tracker you can port to the new mortgage, so I hope you get sorted with Woolwich. Let us know how you get one.

Ems112

shop-to-drop wrote: »

Most mortgage lenders have live online help would be worth visiting Woolwich website to ask there if live help is available.

Just had a look on their website and they don't have this facility...looks like I am going to have to be brave and give them a call!!

shop-to-drop

Ems112 wrote: »

Just had a look on their website and they don't have this facility...looks like I am going to have to be brave and give them a call!!

Shame I have used a couple and found it a great way of getting my questions answered and instantly too not tedious phone calls.